RISMEDIA, February 7, 2011—The National Association of REALTORS® (NAR) and Harris Interactive partnered again to conduct a public opinion study of consumer preferences when it comes to real estate services to see if home buyers’ perceptions have changed given the economic challenges over the past two years. Since the original study in January 2008, the real estate and mortgage markets have seen challenging times. Surveying over 1,100 recent and future home buyers in November/December 2010, NAR and Harris Interactive discovered that usage of and interest in one-stop shopping has held steady over the past two years and, in some cases, increased, as availability of mortgage credit has tightened.
The familiarity of home buyers with one-stop shopping has remained steady with 63% of consumers being extremely or somewhat familiar with it. Some of the key results include:
-The appeal of using a real estate-affiliated service provider has increased 34% since 2008 (39% in 2010 vs. 29% in 2008).
-Buyers continue to believe that one-stop shopping will save them money (78%), make the process more manageable and efficient (75%), prevent things from falling through the cracks (73%), and be more convenient (73%).
-Buyers continue to be more satisfied with one-stop providers than with multiple providers.
-Home buyers who used one-stop shopping consistently reported higher satisfaction levels (52%)—a nearly 11% increase in satisfaction from 2008—than those who used multiple sources (42%).
-The top four services buyers want to be affiliated with their real estate agent’s firm are closing (69%), home inspection (63%), home warranty (54%), and mortgage (50%).
The Role of Real Estate Agents
Real estate agents are a highly trusted source, second only to friends and families, according to the recent study. Respondents noted that real estate agents have consistently greater influence over their service-related decisions than mortgage lenders. Home buyers are almost three times more likely to use a real estate agent as their primary point of contact (56%) compared with mortgage lenders (15%). This number represents a 17% increase for real estate agents. Lenders saw a 25% decrease since 2008.
In addition, more than 50% of home buyers who were aware that a firm offered a full range of services reported that it positively impacted their decision to use the agent and the firm (as opposed to no impact or a negative impact.) Since 2008, home buyers have increasingly used the affiliated services with their real estate agent’s firm, with the biggest increase in mortgage lending (39% vs. 31%), followed by closing services (49% vs. 44%) and home inspection (59% vs. 57%).
Perception of Mortgage Markets
Also included in the study, was an update on the home buyers’ perception in regards to the mortgage market in light of its turbulence over the past two years. From the current state of the economy to tightening credit standards, strong majorities believe it will be more difficult to obtain a mortgage than last year. Thirty percent (30%) of respondents believe it will be more difficult for those with good credit to get a mortgage this year compared to 21% in 2008, a 43% increase. Those surveyed were proportionally more negative about the prospects for those with average or poor credit.
Of note, 52% of respondents blamed banks’ unwillingness to make loans as the top reason for added difficulty in obtaining a mortgage. The general state of the economy (28%) and stricter laws/regulations from Congress (10%) were also considered impediments.
One-stop shopping has continued to gain popularity with buyers and satisfaction levels consistently outperform multiple unaffiliated service providers. Nevertheless, there are still many opportunities for real estate firms to increase the percentage of consumers who purchase a home through one-stop shopping by means of education and training.
These results are not only important for real estate businesses but they are also important for our leaders in Congress. Recent legislation contains provisions that would likely significantly limit the ability of firms to provide one-stop options. NAR and our industry partners continue to work to fix that legislation so that consumers can continue to enjoy the superior service and other benefits associated with one-stop shopping.
Ken Trepeta is the director of Real Estate Services for the National Association of Realtors®.